Economy crash =/= stock market crash?

adindas

Type_45 said:

masonic said:

Type_45 said:

masonic said:

Type_45 said:

You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

I don't know if that was an open question, but if I knew it I'd be using options and inverse ETFs to profit on the way down. If I only strongly suspected it, probably a heavy allocation to cash, some US TIPS for currency diversification, the obligatory slice of gold, and some exposure to residential property. Taking equities perhaps down to 30-40% and focused on defensives.

In your "strongly suspect" scenario, what would be your approximate/desired percentage allocations between those asset classes (given that you've said that about ~35% would be defensive equities)?

I'd be unlikely to hold more than 10% in gold, taking the total to ~45%, perhaps 15% in property making ~60%, then the other 40% split between the bonds and cash - to some extent directed by wishing to hold the cash outside of a tax wrapper in a consumer savings account. Would then plan to 'over-rebalance' in stages back to about 80:20 equities/bonds by the point markets had reached that 80% low point. Can't say I've thought long and hard about it though as it's not an outcome I even slightly suspect.

That sounds like a good plan.  And some people I listen to say 10% gold is all you need in such a doomsday scenario.  

What is the reason though to have your cash in a savings account, as opposed to leaving it in cash in your S&S ISA?  (It seems to me the interest you'd earn is minimal, and you'd not want to take money out of the ISA unless you can help it.)

Something is always better then nothing, isn't it. There are some regular savers paying 3.5%. There are also easy access saving earning 1.75%. This money could easily be deployed almost instantly when you need it.

Also you are not in hurry to use up your current ISA allowance until early April next year.

Unless it is a flexible ISA, once you put it into ISA in your investment account you can not withdraw it any more without losing your annual allowance.

masonic

Type_45 said:

What is the reason though to have your cash in a savings account, as opposed to leaving it in cash in your S&S ISA?  (It seems to me the interest you'd earn is minimal, and you'd not want to take money out of the ISA unless you can help it.)

Adindas has hit the nail on the head. These are potentially large sums of cash, so worth getting some return on it, especially as it could take years for things to play out.

I would not withdraw from an ISA, unless I first transferred the money to a flexible cash ISA and could withdraw and replace it to keep its status. Personally, I still have a queue of unwrapped assets that I haven't been able to get into an ISA within the annual allowance, so probably wouldn't need to withdraw. Having readily accessible emergency cash seems like a good option if you really believe there's going to be such a significant financial collapse. There could be all sorts of difficulties and delays at play.

Type_45

Thrugelmir said:

Type_45 said:

Thrugelmir said:

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

I am expecting the equities market to collapse.  When it does, I also expect gold/silver to go down with it.  But I expect gold/silver to come out of it better once money starts flowing there.

Having a cash allocation means that:

1)  Some of my portfolio is safeguarded when everything goes down.
2)  I have cash to take advantage of cheap gold/silver stocks (SGLN & SSLN) in anticipation of gold/silver rising sharply before equities do.
3)  If I so choose, I can buy equities at a 50%-80% discount.  My plan is to stick with gold/silver ETCs (SGLN & SSLN), but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.



You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

If company profits attributable to stock holders fall in the short term and future expectattions are lowered. What's this "discount" ?  Individual share prices are somewhat more complex than what somebody paid yesterday to buy the stock. 

My equities ETF of choice is VWRP.  In the year or so since I've dabbled in it the price has ranged from 78p-88p.

By "discount", I mean that it would look very attractive if I could suddenly buy it for 40p, for example.

So you'd buy shares on the basis of price compared to recent historical activity, rather than any financial or economic fundamentals. Presumably VWRP was selected originally as was an above average performer. 

In the case of VWRP, yes I would.  It's an ETF form of the VLS100 fund.  So if it doesn't have sound fundamentals then neither does the stock market as a whole!

Type_45

masonic said:

Type_45 said:

What is the reason though to have your cash in a savings account, as opposed to leaving it in cash in your S&S ISA?  (It seems to me the interest you'd earn is minimal, and you'd not want to take money out of the ISA unless you can help it.)

Adindas has hit the nail on the head. These are potentially large sums of cash, so worth getting some return on it, especially as it could take years for things to play out.

I would not withdraw from an ISA, unless I first transferred the money to a flexible cash ISA and could withdraw and replace it to keep its status. Personally, I still have a queue of unwrapped assets that I haven't been able to get into an ISA within the annual allowance, so probably wouldn't need to withdraw. Having readily accessible emergency cash seems like a good option if you really believe there's going to be such a significant financial collapse. There could be all sorts of difficulties and delays at play.

What about keeping cash at home under those circumstances?

grumiofoundation

Type_45 said:

Thrugelmir said:

Type_45 said:

Thrugelmir said:

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

I am expecting the equities market to collapse.  When it does, I also expect gold/silver to go down with it.  But I expect gold/silver to come out of it better once money starts flowing there.

Having a cash allocation means that:

1)  Some of my portfolio is safeguarded when everything goes down.
2)  I have cash to take advantage of cheap gold/silver stocks (SGLN & SSLN) in anticipation of gold/silver rising sharply before equities do.
3)  If I so choose, I can buy equities at a 50%-80% discount.  My plan is to stick with gold/silver ETCs (SGLN & SSLN), but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.



You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

If company profits attributable to stock holders fall in the short term and future expectattions are lowered. What's this "discount" ?  Individual share prices are somewhat more complex than what somebody paid yesterday to buy the stock. 

My equities ETF of choice is VWRP.  In the year or so since I've dabbled in it the price has ranged from 78p-88p.

By "discount", I mean that it would look very attractive if I could suddenly buy it for 40p, for example.

So you'd buy shares on the basis of price compared to recent historical activity, rather than any financial or economic fundamentals. Presumably VWRP was selected originally as was an above average performer. 

In the case of VWRP, yes I would.  It's an ETF form of the VLS100 fund.  So if it doesn't have sound fundamentals then neither does the stock market as a whole!

No it's not. Do you think your apparent lack of inability/unwillingness to research basic facts undermines your predictions of an 80% stock market crash?

Type_45

grumiofoundation said:

Type_45 said:

Thrugelmir said:

Type_45 said:

Thrugelmir said:

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

I am expecting the equities market to collapse.  When it does, I also expect gold/silver to go down with it.  But I expect gold/silver to come out of it better once money starts flowing there.

Having a cash allocation means that:

1)  Some of my portfolio is safeguarded when everything goes down.
2)  I have cash to take advantage of cheap gold/silver stocks (SGLN & SSLN) in anticipation of gold/silver rising sharply before equities do.
3)  If I so choose, I can buy equities at a 50%-80% discount.  My plan is to stick with gold/silver ETCs (SGLN & SSLN), but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.



You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

If company profits attributable to stock holders fall in the short term and future expectattions are lowered. What's this "discount" ?  Individual share prices are somewhat more complex than what somebody paid yesterday to buy the stock. 

My equities ETF of choice is VWRP.  In the year or so since I've dabbled in it the price has ranged from 78p-88p.

By "discount", I mean that it would look very attractive if I could suddenly buy it for 40p, for example.

So you'd buy shares on the basis of price compared to recent historical activity, rather than any financial or economic fundamentals. Presumably VWRP was selected originally as was an above average performer. 

In the case of VWRP, yes I would.  It's an ETF form of the VLS100 fund.  So if it doesn't have sound fundamentals then neither does the stock market as a whole!

No it's not. Do you think your apparent lack of inability/unwillingness to research basic facts undermines your predictions of an 80% stock market crash?

It's holdings and it's performance are broadly similar to VLS100.

VLS is a fund, VWRP is an ETF.


I know what they both are. 

Hexane

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

 but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.

You obviously don't share my views about the financial Armageddon we are facing.

The absolutely wonderful thing about this forum is to be able to read a post from someone who has stockpiled 30kg of rice, who is convinced that we are facing imminent "financial Armageddon", and in the same post, talks about possibly buying some VWRP in the medium to long term. That's like, after Armageddon happens!

Stargunner

VLS100 holds about 25% of UK stocks and VWRP holds about 4% of UK stocks, so they are not broadly similar

billy2shots

Type_45,

You are not doing yourself any favours by consistently making  basic errors in this thread.

It is your money so you have the right to do with it as you wish but it might be better stepping back from the keyboard and spending more time on learning some of the basics to give yourself a better foundation before forming your opinion.

Your last couple of posts alone-

-VWRP is priced in £ not Pence. 

- VWRP is the Acc version of VWRL not VLS100

We all have to live and die by our own choices but at least understanding things better can help us make those choices. 

InvesterJones

On the topic of this thread, Pensioncraft recently released a very relevant video discussing the relationship between economic decline and market decline:

https://youtu.be/53DD6pgIRDM